Dow plunges 519 pts on economy, Europe worries

New York: Stocks are falling at the close of trading as investors' attention returns to the weak economy and Europe's debt problems.

The Dow Jones industrial average is down 519, or 4.6 per cent, to 10,720. It's the third time in the last five trading days that the Dow lost more than 500 points. The S&P 500 is down 51 points, or 4.4 per cent, to 1,121. The Nasdaq is down 101, or 4.1 per cent, to 2,381.

European bank stocks fell on worries that the region's debt problems are getting worse. That pulled down US bank stocks. Financial stocks in the S&P 500 lost more than 7 per cent.

The drop erases Tuesday's big gain following a Federal Reserve pledge to keep rates low. The Fed said it expects the recovery to remain slow.